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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (34981)	5/21/2008 12:41:07 AM
From: calgarydude	Respond to of 217705

Oil majors are saying it is the fault of national oil companies for not allowing access to the best reserves. National oil companies are saying it is the fault of the majors because they are gaming the retail market. On the demand side, the market is inelastic because of structural reasons - ie farmers, truckers, airlines and most commuters consume fuel as part of their earning revenue. Also, new entrants (India, China) are willing to pay high prices for a step improvement to their living standards. On the supply side, it is harder to tell. High prices mean that exporters can maintain their income with lower exports - possibly some exporters (Saudi Arabia?) are saving oil for future generations. The more likely explanation is that most exporters have hit the limit of what net exports (production - demand) that they can provide. Inelastic demand and inelastic supply are a formula for very high prices.